Gold prices rose on Friday, marking their first weekly gain in five supported by a weakened US dollar. Bullion’s safe-haven allure was also driven by inflationary risks.
Spot gold rose 0.7% to $1,812.03 per ounce by 8:18 a.m. ET, on course for about a 1.6% rise this week. U.S. gold futures rose 0.9% to $1,813.30.
The rise for bullion came following the Fed announcing plans to more aggressively slow its bond purchases and projecting three interest-rake hikes next year.
It is possible that gold is getting support from hedging the economic risks involved with the spread of the new variant of the coronavirus that causes COVID-19. Rising cases due to the omicron variant have driven investors to take some exposure to precious metals until the coronavirus situation cools down.
Gold prices are benefiting from the prospect of high inflation. Other precious metals followed with silver rising 0.5% to $22.58 per ounce. Platinum was up 0.4%, to $940.16.
Analysts are hopeful for the prospects of gold breaking above the $1820 level. If this happens then it is likely that we go looking towards the $1850 level and extend towards the $1875 level. In the last weeks of the year, it is very likely that the market continue to see choppy behavior, putting traders and gold investors in a range. Ultimately, the value of the US dollar will directly affect gold and silver prices but we are yet to see any major fluctuations or moves.
Interestingly, a cooling off cryptocurrency market has seen investors pull away from volatile digital assets and back towards safe havens like bullion and mining stocks.
As gold prices moved in the last trading session, some mining stocks followed. Alamos Gold Inc. (AGI) is a gold miner registered a 4.33% upside in the last session after trading in the red over the past 5 sessions. The stock’s 5-day price performance is -8.70%, and the overall price performance for the year is -26.03%.
Alamos Gold Inc. has outperformed its competitors in share price, compared to the industry in which it operates. When looking at the miner’s performance over the past 5 years, we see that the company’s earnings grew an estimated 16.40%. While earnings are projected to return 49.50% in 2021.
Alamos Gold has a market valuation of $3.52 billion with a dividend yield of 1.43% on its mining stock. With an expected $224.25 million of revenue for the current quarter, it is understandable why investors remain optimistic about this gold stock.